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NATIONAL RECOVERY ADMINISTRATION
DIVISION OF REVIEW
EVIDENCE STUDY
NO. 25
OF
THE MOTION PICTURE INDUSTRY
Prepared by
DANIEL BERTFAND
November, 1935
PRELIMINARY DRAFT
(NOT FOR RELEASE: FOR USE IN DIVISION ONLY)
Monofzrapii
LIBRARY OF CONGRESS I
OCT 1 2 1336 1
DIVISION OF DOCUMENTS |
The EVIDENCE STUDIES were originally planned as a means of gathering
-evidence "bearing upon various legal issues which arose under the National
1 Industrial Recovery Act.
These studies have value quite aside from the use for which they were
originally intended. Accordingly, they are now made available for confidential
use within the Division of Review, and for inclusion in Code Histories*
The full list of the Evidence Studi
e s is
as follows:
i.
Automobile 'Manufacturing Ind.
23.
Mason Contractors Industry
2.
Boot and Shoe Mfg. Ind.
24.
Me n ' s Clo thi ng Indus t ry
3.
Bottled Soft Drink Ind.
25.
Motion Picture Industry
4.
Builders' Supplies Ind.
26,
Motor Bus Mfg. Industry (Dropped)
5.
Chemical Mfg. Ind. -
27.
Needlework Ind. of Puerto Rico
6.
Cigar Mfg. Industry
28.
Painting & paperhanging & Decorating
7.
Construction Industry
29.
photo Engraving Industry
8.
Cotton Garment Industry
30.
Plumbing Contracting Industry
9.
Dress Mfg. Ind.
31.
Retail Food. (See No. 42)
10.
Electrical Contracting Ind.
32.
Retail Lumber Industry
11 .
Electrical Mfg. Ind.
«.j3 .
Retail Solid Fuel (Dropped)
12.
Pa"b. Metal prod. Mf g. , etc.
o4 .
Retail Trade Industry
13.
Fishery Industry
35 ,
Rubber Mfg. Ind.
14.
Furniture Mfg. Ind.
o .
Rubber Tire Mfg. Ind.
15.
General Contractors Ind.
37.
Silk Textile Ind.
16.
Graphic Arts Ind.
33.
Structural Clay Products Ind.
17.
Gray Iron Foundry Ind.
lib .
Throwing Industry
18.
Hosiery Ind.
40.
Trucking Industry
19.
Infant's & Children1 s Wear Ind,
41.
Waste Materials Ind.
20.
Iron and Steel Ind.
42.
Wholesale & Retail Food Ind. (See No.
21.
Leather
43.
Wholesale Fresh Fruit & Veg. 31)
22.
Lumber & Timber Prod. Ind.
In addition to the studies brought to completion, certain materials have
been assembled for other industries. These MATERIALS are included in the series
and are also made available for confidential use within the Division of Review
and for inclusion in Code Histories, as follows:
44. Wool Textile Industry 49.
45. Automotive Parts & Equip. Ind, 50.
46. Baking Industry 51.
47. Canning Industry 52.
48. Coat and Suit Ind. 53.
Household Goods & Storage, etc. (Drop-'
Motor Vehicle Retailing Trade Ind, ped)
Retail Tire & Battery Trade Ind.
Ship & Boat Bld'g. & Repairing Ind,
Wholesaling or Distributing Trade
L. C. Marshall
Director, Division of Review
CONTENTS
Page
Foreword 1
PART I: INTRODUCTION
CHAPTER I ~ THE OP THE INDUSTRY 2
Definitions of the Industry 2
Description and Scope of the Industry 2
Assets. . 3
Cap i t al Inve s tn ent 4
Interstate Character of the Industry. ....... 4
PART II: PRODUCTION
CHAPTER I ~ THE NATURE OP THE DIVISION 6
Total Number of Establishments 6
ITumber of Establishments "by Principal States. ... 6
ITumber of Li embers and Size of Concerns 7
Cross and Llet Income. , 7
let Income "by Liajor Companies 8
Total Cost of Production 9
Volume of Production. 9
Total Domestic and Poreign Releases 9
Production of "Peat-ares". 10
Production of "Shorts" 11
"Box-Office Rating" of Producers. 11
CHAPTER II ~ LABOR STATISTICS
Total Number of Employees 13
Number of "Extras" 13
Seasonal Variation in Employment, 14
Total Annual Wages. 15
Annual Wages by Principal States. .... 16
Salaries and Wages as a Per Cent of Cost
of Production. ..................16
Wages of Extras 17
Average Hourly Wage Rate. 18
Average Hours Worked per Week 18
Child Labor 19
Employees by Principal States .... 19
Total Employees 19
Wage Earners .20
(Continued)
8976
CONTENTS (Continued)
Page
CHAPTER III ~ MATERIALS , .21
Cost of Principal Materials Used. 21
Source of Equipment and Supplies. ......... 21
CHAPTER IV - UNFAIR TRADE PRACTICES. 23
Enticement of Talent and Activities of Agents ... 23
CHAPTER V - GENERAL INFORMATION f 24
Exports 24
Advertising 24
Productive Caoacity .... ....... 24
Trade Associations ..... 24
notion Picture Producers and
Distributors of America, Inc. ....... 24
The Academy of Motion Picture
Arts and Sciences ............. 24
Trade Union Activity 25
PART III: DISTRIBUTION
CHAPTER I - THE HATURE OP THE DIVISION. ............ 26
History and Scope of Division ...... 26
Origin of Film Exchange ... ....... « 26
Developments in Film Distribution ...... 26
National and "State Right ,r
Distribution. 26
Producers as Film Distributors. ....... 27
Present-Day Film Distribution 27
Total ITumber of Exchange Establishments ...... 28
Number of Exchange Establishments by
Principal States 28
Volume of Business by Principal States, 28
Number of Establishments by Type of
Exchange .... ........,.*...., 29
Volume of Business by Type of Exchange. ...... 29
CHAPTER II - LABOR STATISTICS *.,... 31
Average Annual Number of Employees, ........31
Total Number of Employees by Types
of Exchanges .«,.,.. 31
Average Annual Payrolls .«•♦..,..,.,.. 31
Per Cent Salaries and Wages are of
Total Expense f ... 31
( Continued)
8976
— ii-
CONTENTS ( Continued)
Page
CHAPTER III - UNFAIR TRADE PRACTICES 32
Block Booking and Blind Booking 32
Forcing Short Subjects with Features ....... 33
Overbuying. .........33
CHAPTER IV - GENERAL INFORMATION 34
Trade Association Activity ............ 34
PART IV: EXHIBITION
CHAPTER I - THE HATERS OP THE DIVISION 35
History and Description of Division .35
The Development of Hot ion Picture
Theatres . 35
The Development of the Entertainment
Program. .... .....35
Entrance of Produ.cers into the
Exhibition Division. .35
Classes of Exhibitors ,35
Total Number of Theatres 36
Number of Theatres by Principal States 36
Number of Theatres Open and Closed 37
Seating Capacity. . 37
Number of Theatres and Number of Seats
Classified by Type of Ownership 39
Total 'Theatre Receipts and Attendance 40
Theatre Receipts by Principal States . 41
Competition with Other Industries. . 41
Expenditures for Theatre Construction. ...... 41
Financial Condition 42
CHAPTER II - LABOR STATISTICS 43
Number of Employees ...........43
Total Annual Payrolls. 43
Total Annual Payrolls as a Per Cent of
Total Receipts 44
Nunber of Wage Earners and Total Annual
Wages by Principal States. 44
Wages and Hours .......45
In Principal Cities 45
In Washington, D. C 46
( Continued)
8976
— iii-»
_ _ .
C01TTEITTS (Concluded)
Page
CHAPTER III - MATERIALS 49
lTum"ber of Films Used 49
Per Cent of Consumer's I.iotion Picture Dollar
Spent on Film Rental .49
CHAPTER IY - U1EA.IR TRADE PRACTICES 51
Clearance and Zoning. .«...., 51
Other Unfair Trade Practices 51
Trade Associations. ., 52
The Lotion Pictiire Theatre Ormers
of America. ..... .....52
Allied States Association of
Hot ion Picture Exhibitors .52
Trade Union Activity 52
International Alliance of Theatrical
State Employees and Lotion Picture
Machine Operators of the United States
and Canada. ........ .......52
APPSITDIIC f 53
Exhibit A - Persons Qualified as Experts on the Entire Industry . 53
Exhibit 3 - The Advent of Sound in Lotion Pictures . 55
Sound in Exhibition 55
Sound in Production 56
8976
— iv—
LIST OP
TABLES
Page
TABLE I - Assets of Motion Picture Producers, 1930-1933. ... 2
TABLE I A - Assets of Motion Picture Theatres, 1930-1933 ...... 4
TABLE II - Stotal Number of Establishments, for Census
Years, 1921-1933 6
TABLE III - lumber of Establishments, by Six Principal
States 7
TABLE IV - Gross Income and Net Profit or Loss, 1927-1932 ... 8
TABLE V - Consolidated Net Income or Loss for Six
Major Motion Picture Companies, 1932-1934 8
TABLE 71 - Total Cost of Production, for Census Years,
1921-1933 9
TABLE VII - Number of Domestic and Foreign Motion Picture
Features Released in the United States,
1927-1934 10
TABLE VIII - Features Released "by Major and Independent
Domestic Companies ........ ... 10
TABLE IX - Total Number of Shorts Produced, 1930-1931
to 1954-1935 11
TABLE X - Estimate of Box Office Strength of Feature
Pictures, for each of Eight Major Companies
and All Independents, 1933 and 1934 12
TA3LE XI — Average Annual lumber of Salaried Emplo^.-ees
and of TTage Earners ..13
TABLE XII - lumber of Placements and Wages of "Extras"
Registered vrith the Central Casting Corporation,
1926-1934 \ 14
TABLE XIII - Number of Wage Earners, by Months, 1929 and 1933 . . 15
TABLE XIV - Total Annual Salaries and Wages, 1929 and 1933 ... 16
TABLE XV - Annual Wages, by Three Principal States,
1929 and 1933 " . 16
(Continued)
8976
— v—
TABLES (Continued)
Page
TABLE XVI - Total Cost of Production, Annual Salaries
and Annual Wages, 1929 and 1933 17
TABLE XVII - Distribution of Placements of Extras "by
the Central Casting Corporation at
Specified Daily Wage Pates, 1930 and 1933 18
TABLE XVIII - Lumber of Establishments and Number of
Wage Earners, Classified by Number of
Eull-Time Hours Worked per Week, 1929 ....... 19
TABLE XIX - Average Annual Number of Employees, by
Three Principal States, 1929 and 1933 19
TABLE XX - Average Annual Number of Wage Earners,
by Three Principal States, 1929 and 1933 20
TABLE XXI - Total Cost of Production and Cost of
Materials j Euel, and Purchased Electric
Energy 21
TABLE XXII - Number of Establishments Producing Photo-
graphic Apparatus and Supplies, by
Principal States » 22
TABLE XXIII - Exports of Motion Picture films, 1929 and 1934 . . 24
TABLE XXIV - Number of Exchanges and Volume of Business
Handled, by Six Principal States, 1929 28
TABLE XXV - Number of Exchanges, and Number of Empl03^ees,
by Principal Types of Exchanges, 1929 29
TABLE XXVI — Volume of Business, Salaries, Wages and
Total Expenses, by Principal Types
of Exchanges, 1929 30
TABLE XXVII - Average Annual Number of Employees
and Average Annual Payrolls, 1929 . „ 31
TABLE XXVIII- Number of Motion Picture Theatres,
by Principal States 36
TABLE XXIX - Sound and Silent Motion Picture Theatres,
Classified as to Whether Open or
Closed, 1929-1935 "38
( Continued)
8976
-vi-
TABLES (Concluded)
Page
TABLE
TABLE
TABLE
TABLE
TABLE
TABLE
:i -
TABLE XXXII -
TABLE XXXIII -
TABLE XXXIV -
[XXV
TABLE XXXVI -
TABLE XXXVII
TABLE XXXVIII -
TABLE XXXIX -
XL -
XL I -
XLII -
Total limber of Seats in Motion
picture Theatres, 1931-1935 39
Number of Motion Picture Theatres,
Classified Toy 'Type of Ownership, 1933-1935. . . 40
Lumber of Hot ion Picture Theatre Seats,
Classified by Type of Ownership > 1933-1935. . . 40
Estimated Total Bo "-Office Receipts, Average
Admission Prices, and Attendance, 1929-1934 . . 41
Annual Expenditure in Theatre Construction,
1929 - March, 1935 42
Gross Income, let Profit or Loss, 1927-1932 . . 42
Annual Average Lumber Employed, Pull a.nd
Part-Time, "by Types of Theatres, 1933 43
Total Payrolls, Pull and Part-time,
by Types of Theatres, 1933 44
Total Receipts, ifamber of Pull-Time Employees
and. Payrolls, Classified by 10 Principal
States, 1933 \ .... 45
Wage Scales and Hours Worked per Week by
Unionized Projectionists, Classified by
Ifamber of Cities, 1933 46
Average Weekly Hours and Wages of Employees
in 11 Neighborhood Motion Picture Theatres
of Washington, D. C. , by Branch of Work
and Occupation, 1951 .47
Average Weekly Wages in Different Types of
Motion Picture Theatres of Washington, P. C. ,
by Branch of Work and Occupation, 1951. .... 48
Per Cent of the Consumer's Motion Picture
Dollar Accounted for by the Chief Divisions
of the Industry, 1933 50
8976
-Vll-
MOTION PICTURE INDUSTRY
Foreword
The date, 'presented in this report have been assembled from "both government
and private sources. Host of the government data used have "been taken from
publications of the Bureau of the Census, but data have also been taken from
reports of the Bureau of Labor Statistics and the Bureau of Internal Revenue.
Among the private sources, the most important are the Motion Picture Almanac,
the Film Daily Yearbook, reports of the Standard Statistics Company, and the
trade association, the Motion Picture Producers and Distributors of America,
Inc .
The organization of this study is somewhat different from that called for
in the Outline for Evidence Studies. The Industry as codified included the
production, distribution, and exhibition of moving pictures, and it has been
considered advisable to follow the Outline through separately for each of these
divisions. The present study therefore consists of four parts: Part I, Intro-
duction, in which certain material pertaining to the Industry as a whole is
presented; and Part II, Production; Part III, Distribution; and finally, Part
III, Exhibition. The particular Census publications used in describing each of
the three main divisions of the Industry are as follows: Production, Census
of Manufactures; Distribution, Census of Uholesale Distribution; and' _
Exhibition, Census of American Business, ."Services", Amusements, and Hotels",
The Census data are considered roughly applicable to the appropriate
division of the Industry as codified. The fact that the Census coverage toes
not include the smaller establishments is not held significant in this Industry.
As pointed out in the text, however, Census data and those from private sources
often indicate large discrepancies which are presumably due to the fact that
the latter are frequently estimates and to difference in the coverage of the
two sets of date..
8976
PART I: INTRODUCTION
Chapter I. The Nature of the Industry
Definitions of the Industry
The Motion picture Industry, as defined "by the Code of Pair Competition
for the Industry, includes,
".... without limitation, the production, distribution, or
exhibition of motion pictures and all activities normally related
thereto, except as specifically excepted from the operation of the Code."
The limitations in the scope of the Code are as follow:
"Nothing in this Code shall "be deemed to apply to the pro-
duction, distribution, or exhibition of motion pictures on film
of recognized substandard widths, or to slide films, or to non-
theatrical motion pictures designed primarily for educational,
scientific, industrial, commercial, advertising, selling, or other
non- theatrical purposes, or to television of motion pictures,
provided that the commercial production, distribution, or exhibi-
tion of such films shall be subject to investigation by the Code
Authority to determine whether such production, distribution, or
exhibition of such films is unfair competition to an established
motion picture theatre or theatres. If found to be unfair com-
petition, the Code Authority shall promulgate rules and regulations
governing such unfair competition."
The Code covered "actor employees in vaudeville and presentation motion
picture theatres" in "both permanent and traveling companies of artists play-
ing presentation and vaudeville houses," but it did not cover "amateur" shows,
"rep," "tab," "tent," "wagon," "truck" and "medicine" shows, "show-boat" or
"burlesque," as these terms are understood in the theatre.
The Industry as defined by the Census of Manufactures embraces,
".... all processes and activities connected with the pro-
duction of motion pictures, such as the photography of scenes, the
development of exposed films, the printing of projection films, and
other studio and laboratory work necessary in connection with the
preparation of projection films for use."
Since Census of Manufactures data thus cover only motion picture pro-
duction, they are not applicable to the entire Industry as defined by the
Code, but only to the production branch of the Industry which is described in
Part II of this study. The remaining branches of the Industry, distribution,
and exhibition, are covered by the Wholesale Census and the Census of Service,
Amusements, and Hotels.
Description and Scope of the Industry
The Industry as codified is composed of three major divisions of activity:
production, distribution, and exhibition. These three economic divisions of
this Industry are closely inter- related with and dependent upon each other.
The production division covers all of the processes and activities involved in
8976
the making of motion pictures. It includes the preparation and photography of
scenes; the developing of exposed films; the printing of projection films; and
other studio and laboratory work required in the preparation of positive films
for use. The distribution division involves the "renting" or "leasing" of
films to exhibitors; the maintenance and physical distribution of the films,
and the collection of due accounts. It also includes the outright sale of
finished films and the sale of advertising materials. The exhibition division
includes the commercial exhibiting of the finished films in the theatres; and
also vaudeville and presentations given in conjunction with motion pictures.
This Industry, which has assumed a position of unusual importance because
of its far-reaching influence upon social and economic standards and conduct,
is characterized by rapid growth by the possibility of radical changes through
technical developments in the film and related industries by the geographical
concentration of production. It's further characterized by the large degree
of integration of its three main divisions, and the individuality in the in-
dustrial practices which it follows.
Production, distribution, and exhibition are both horizontally and verti-
cally integrated and the concentration of corporate ownership in the hands of
a few large companies provides an economic division of the Industry between
what are known as "major" and "independent" interests. The economic conse-
quences of this concentration are reflected in nearly all problems of the
Industry.
Assets
Tables I and IA sho',",T the assets of motion picture producers and exhibitors
for the years 1930 through 1933. Fixed assets constitute the largest type in
both the production and exhibition divisions. Total a.ssets of producers drop-
ped from $934,000,000 in 1930 to $249,000,000 in 1933, while in the exhibition
division total assets rose during the same period from $619,000,000 to $1,~
076,000,000, The number of concerns reporting in the production division
averaged around 175 each year, whereas in the exhibition group the number
rose steadily from 1,889 in 1931 to 2,368 in 1933.
TABLE I
Assets of Motion Picture Producers, 1930-1933
(Dollars In Thousands)
1930
1931
1932
1933
Number Reporting
182
170
177
181
Total Assets
$933,847
$849,916
$411,622
$248,824
Current
Investments
Fixed
Miscellaneous
228,871
251 , 320
384,421
69,235
192,911
220,408
371,766
54.831
54,015
109,593
218,629
29,385
42,057
18 , 543
163.^40
24'4 584
Source: Bureau of Internal Revenue, tabulation sheets and published reports
(Statistics of Income),
8976
. -TMtfflamiirrmrwMMidBBiii
-4-
TA3LE I A
Assets
of I.iotion Pictur
e Theatres,
1930-1933
(Dollars In
thousands )
1930
1931
1932
1933
Number Reporting
1,889
1,809
2 , 152
2,368
Total Assets
$618,792
$717,307
$986,584
$1,076,486
Current
102,404
119,728
205,919
255,927
Investments
53,340
68 , 143
173,753
244,584
Fixed
389,494
470,433
523 , 241
490,536
Miscellaneous
73,554
59,003
83,771
75,339
Source; Bureau of Internal Revenue, tabulation sheets and published reports
(Statistics of Income).,
Cam tal Invo stment
According to the Motion Picture Almanac the capital investment of the
Industry stood at $2,000^000,000 in each of the years from 1929 to 1935, with
the exception of 1934 when the figure was placed at $1,750,000,000, The invest-
ment in studios is roughly $100,000,000; the investment in the distribution
branch of the Industry is something between $10,000,000 and $20,000,000; while
that for the exhibition branch of the Industry lies between $1,630,000,000 and
$1,880,000,000. In other words, the investments in production or distribution
are insignificant in comparison with the investment in exhibition. In a study
made recently by a group of architects, Messrs. Lamb, Rapp, Alschlager, Eberson
and Schultz, it was estimated that $1,460,000,000 has been spent to date in the
building of theatres exclusive of those parts of theatre buildings given over
to office space. 1/
Interstate Character of the Industry
In the making of films, numerous writers, actors, actresses, directors,
cameramen, and other artists and artisans, are assembled from many different
states and foreign countries. Great quantities of unercoosed films and large
quantities of scenery, costumes, paraphernalia, and properties are transported
from many different states to the studios located in those few where motion
pictures are produced.
The distributors enter into contracts for leases with exhibitors for the
exhibition of films throughout the United States through the media of corres-
pondence, branch offices, and salesmen. Thus film contracts which are entered
into between residents of different states, involve the leasing of a commodity
manufactured in. one state and transported to and used in another state.
1/ Verbal statement by Mr. David Palf reyman of the Theatre Service Division of
the Motion Picture Producers and Distributors of America (June, 1935),
8976
After the films are produced, they are packed into metal containers, and
are transported by parcel post, express trucks and other common carriers, from
the studios and laboratories to exchanges, then to the theatres in cities and
towns of the country. After display to the public, the films are returned to
the exchanges for redistribution to other theatres, or are forwarded to other
exhihitorso Thus, there is a constant current of trade and commerce in films
through the states,,
8976
-6-
PART II: PRODUCTION
/
Chapter I. The Nature of the Division
Total Number of Establishments
Table II indicates the number of establishments engaged in the produc-
tion of motion pictures, It will be noted that in the first Census taken
after the depression years of 1921 and 1933, the number of establishments
showed a marked decrease in each instance.
T&BIE II
Total Number of Establishments, for
Census Years, 1921-1933
Year
Number
Per Cent Change
from Preceding Year
1921
127
1923
97
-23.6
1925
132
+36.1
1927
142
■»• 7.6
1929
142
no change
1931
140
- 1.4
1933
92
•—34 1 3
Source: Census of Manufactures, 1929 and 1933,
"Motion Pictures, not Including Pro-
jection in Theatres."
Number of Establishments by Principal States
An examination of Table III shows that more than 80 per cent of all
motion picture establishments are located in six states. In 1929 California,
the leading state, accounted for 41 per cent of all establishments and New
York accounted for 21 per cent. By 1931 California had gained relatively
and New York had lost, while in 1933 the reverse was true. The concentra-
tion in the six states was more marked in 1931 and also in 1933 than in 1929.
8976
TABLE III
Number of Establishments, "by Six Principal States
1929
J- >J CJ *s
1931
1933
State
1M Lull UC1
1M LLiU UC1
Ppt* (jPnt
Number
per Cent
U X 1UI/ d J-
of Total
of Total
U. S. Total
142
100.0
140
100.0
92
100.0
California
58
40„9
71
50.7
39
42.4
Illinois
8
5.6
7
5.0
8
8,7
New Jersey
6
4.2
5
3.6
3
3.3
New York
30
21.1
26
18,5
24
26.0
Ohio
8
5.6
6
4.3
3
3.3
Pennsylvania
5
3.6
6
4.3
1
1*1
Total, 6 States
115
81.0
121
86.4
78
84.8
Total, Other States
27
19.0
19
13.6
14
15.2,
Source: Census of Manufactures, 1929, 1931. and 1933. "Motion Pictures, not
Including Projection in Theatres."
Number of Members and Size of Concerns
The members of the production division of the Industry fall into two
groups. There are eight large companies which produce approximately 80 per
cent of the total value of production as valued on a cost-of-production
basis and approximately 65 per cent by number of features produced. 1/ Pive
of the major companies supply nearly 100 per cent of the newsreels produced,
The remaining pictures are produced by approximately 30 independent com-
panies having sufficient importance to have the names of their production
staffs listed in the Motion Picture Almanac. Most of these minor producing
firms contribute their portion of the product under a "unit" system which
fits into and becomes a part of the production schedules of the major pro-
ducers. In addition to the above, there are many other small producers who
make one or two motion pictures intermittently over a period of years.
Cross and Net Income
Table IV shows the gross income and the net profit or loss of motion
picture producers from 1927 through 1932. In 1930 gross income increased al-
most 70 million dollars over the 1929 level of $343,445,000 and the producers
reported a profit of more than $40,000,000 annually in each of these years.
Although in 1931 gross income was almost 100 million dollars greater than in
1929, there was a net loss of $8,674,000. In 1932 gross income fell to less
than one-half the 1931 level and the producers suffered a net loss of over
$30,000,000. -
1/ Motion Picture Producers and Distributors of America
■Hi
-8-
The decrease in the profitability of the Industry has "been attributed
to a number of factors, including over-expansion in the direction of seating
capacity, erection of theatres at an excessive cost per seat, mismanagement
within the Industry, payment of inordinately large compensation for services,
and the effect of the depression upon the demand for entertainment.
TABLE IV
Gross Income and Net Profit or Loss, 1927-1932
(in thousands)
Year
Gross Income
Net Profit or Loss
1927
$239,426
$8,032
1928
230,266
17,109
1929
343,445
44,400
1930
410,700
40,282
1931
441,948
-8,674
1932
190,795
-30,199
Source: Bureau of Internal Revenue, Statistics of Income,
Net Income by Major Companies
Table V shows the consolidated net income of six major companies for
1932, 1933, and 1934. Attention is directed to the recovery made by the
three companies, namely, Pox, Warner, and Paramount, which had the largest
net bases in 1932. The totals show that the group loss of $36,519,000 in
1932 had by 1934 been turned into a net income of $14,371,000.
TABLE V
Consolidated Net Income or Loss for Six Major Motion Picture
Companies, 1932-1934
(in thousands)
Company 1932 1933 1934
Group Total -$36,519 $4,568 $14,371
Columbia Pictures Corporation 574 740 1,009
Pox film Corporation - 16,151 1,411 3,000 a/
Loetr' s Incorporated 7,961 4,034 7,480
Warner Brothers Pictures, Inc. - 14,095 -6,292 -2,530
Universal Pictures - 1,250 -1,017 - 500 a/
Paramount-Publi.c Corporation - 13,558 5,692 a/ 5,912 a/
Source: Standard Statistics Company, Standard Trade and Securities.
"Theatres and Motion Pictures, « Vol. 75, No. 22 (Pehruary 20, 1935).
a/ Estimated.
8976
J
~9~
Total Cost of Production
The production of motion picture films is not a manufacturing activity
in the sense in which the term is generally used to designate the factory
production of commodities. Furthermore, since the Motion Picture Industry
does not usually sell, "but leases or rents its product, it is impossible to
determine the actual value of the output of a given year until a long time
after its close. It is therefore necessary to substitute "cost of produc-
tion" for "value of product" in presenting data for this Industry.
An examination of Table VI indicates that the cost of production increased
each year from 1921, until it reached a peak of $184,102,000 in 1929 when
the introduction of equipment for sound production caused a large increase in
cost of production. In 1931, the Industry's decreased production costs can
probably be attributed in part to better adjustment to the innovation of
sound, but the impact of the depression was probably beginning to be felt.
TABLE VI
Total Cost of Production, for Census Years, 1921-1933
(In thousands)
Year
Cost of
Per Cent Change
Production
from Preceding Year
1921
$77,397
1923
86,418
+ 11.7
1925
93,636
+ 8.4
1927
134,343
•i- 43c 5
1929
184,102
+ 37.0
1931
154,436
- 16.1
1933
119,343
- 22.7
Source: Census of Manufactures. 1929 and 1933. "Motion
Pictures, not Including Projection in Theatres."
Volume of Production
Total Domestic and Foreign Releases. - Table VII shows the total number
of features released in the United States for the years 1927 to 1934. Data
are presented to show how many of the total releases were foreign features and
how many were made by American producers. During the years 1932, 1933, and
1934, the proportion of foreign pictures releases was greater than in most of
the prior years. In 1934 the number of foreign features shown in this country
amounted to 27.5 per cent of the total.
8976
-10-
TABLE VII
Number of Domestic and Foreign Motion Picture Features Released
In the United States, 1927-1934
Total Domestic Features Foreign Features
Number Per Cent Number Per Cent Number Per Cent
of Total ■ of Total of Total
1927 743 100,0 668 89.9 75 10.1
1929 820 100.0 627 76.5 193 23.5
1929 850 100.0 705 82.9 145 17.1
1930 600 100.0 514 85.7 86 14.3
1931 627 100.0 505 80,5 122 19.5
1932 685 100.0 489 71c4 196 28.6
1933 644 100.0 507 78.7 137 2lc3
1934 662 100.0 480 72.5 182 27.5
Source: Film Daily Yearbook of Motion Pictures, 1935.
I-Todaction of "Features." - Table VIII shows the number of features
produced from 1927 through 1934. Attention is directed to the high number
of releases by major companies in 1927 and the gradual decline through 1932,
with the subsequent moderate rise. During these years the major companies
averaged almost 70 per cent of the total number of feature pictures released.
TABLE VIII
Features Released by Major and Independent Domestic
Companies a/
Kind of Company
Total Major Independent
iamber Fer~CehT ^mber Per Cent lumber Per Uent
of Total of Total of Total
1927 668 lOOcO 510 7603 158 23.7
1928 627 100.0 462 73„7 165 26.3
1929 705 100.0 393 55 „ 7 312 44.3
1930 514 100.0 352 70o4 152 29.6
1931 505 100.0 324 64.1 181 35.9
1932 489 100.0 318 65.0 171 35.0
1933 507 100.0 338 66.7 169 33.3
1934 480 100.0 361 75.2 119 24.8
Source: Film Daily Yearbook of Motion Pictures. 1935.
a/ During 1927-1931, ten companies listed; during 1932-1934, eight
companies listed.
8976
-11-
Production of "Shorts." - Table IX shows the estimated number of
"Short Subjects," of one or two-reel length, produced for the years 1930-
1931 through 1934-1935. The table does not include newsreels produced
annually by each of the five major companies, or approximately 20 reels.
TABLE IX
Total llumber of Shorts Produced,
1930-1931 to 1934-1935
Season
Number
1930-1931
1,286
1931-1932
1,372
1932-1933
1,297
1933-1934
1,062 a/
1934-1935
956 a/
Source: Compiled from data in the Motion
Picture Almanac.
a/ Estimated on basis of announced
plans of companies.
"Box-Office Rating" of Producers
The relative quality and importance of the production of the eight
major producers may be ascertained from an examination of Table X, which
shows the estimated "box-office strength" of feature pictures produced by
the major producers in comparison with the feature pictures produced by the
independent producers.
Each feature release is assigned a weight, according to indicated box-
office potency, and a weighted average for the entire year is then computed,
A perfect score of 1,000 would result only if every film of a producer were
given a "Hit" rating.
It will be seen from the table that United Artists and Loew1 s (HGM) re-
ceived the highest box-office ratings in both 1933 and 1934. In 1934 they
received 762 and 552 respectively. In the same year, independent companies
received an average rating of 164.
8976
-12-
TABLE X
Estimate of Box Office Strength of feature Pictures,
for Each of Eight Major Companies and All Independents,
1933 and 1934
Company-
1933
1934
United Artists
583
762
Loexr' s IMGMJ
582
C C
552
TTarner Brothers
486
429
H.Z.O.
395
433
Paramount
380
508
Pox Film
368
446
Universal
362
366
Columhia
260
302
Average
424
453
Independents
175
164
Source: Standard Statistics Company, Standard Trade and
Securities, "Theatre and Motion Pictures," Vol.
75, No. 22 (February 20, 1935) p. TH-48.
-13-
PAP.T II: PRODUCTION
Chapter II. Labor Statistics
Total Number of Eirol oyees
Table XI shows the average annual number of employees, in the produc-
tion division as reported by the Census of Manuf actures,. The Ho t i o n P i c tar e
Almanac has estimated the total employment as 30,000 in 1933, compared with
the Census figure of 19.037 for the same year.
TABLE XI
Average Annual Number of Salaried Employees and of
Wage Earners
1929 1931 1933
Salaried Employees 8,818 — 8,260
Wage Earners 10,784 — 10,777
Total 19,602 14,839 a/ 19,037
Source: Census of Manufactures, 1933, "Motion Pictures, Hot
Including Projection in Theatres."
a/ Figures for 1931 are incomplete and not comparable
with figures for other years.
Ilumber of "Extras"
There are no accurate data as to the total number of "extras" employed
in the Industry. Mr. Allen Garcia-, representing extras, stated at the
hearing on the proposed Code that the total number of this type of employee
registered and available has been variously estimated as between 8,000 and
14,000 annually* 1/
In addition, complete data are not available as to the total number
of placements of extras, but Table XII shows the number of such placements
made by the Central Casting Corporation, the leading employment agency for
obtaining jobs for this t"/pe of employee. The number reported by this
agency is considered to represent a great majority of the total number of
placements.
1/ Transcript of NBA Hearing, Motion Picture Industry, September 12, 1933.
8976
-14-
TABLE XII
Number of Placements and Wages
of "Extras" Registered with the
Central Casting Corporation
1926-1934
Placements Wages
iear
Total Number
Average Daily
Total Annual
Average Wage
Number a/
(000 ! s)
per Placement
259,259
710
$2,195
$8.46
1927
330,397
905
2,838
8.59
1928
276,155
758
2,470
8.94
262,958
840
2,401
9.13
1930
252,446
807
2,460
9.74
1931 b/
177,523
621
1,658
9.34
1932 cj
176,785
677
1,545
8.74
1933
251,914
805
2,049
8.14
219,857
705
1,985
9.03
Source:
Motion Picture Almanac, "Animal
Report of the Central Casting
Corporation. "
To tad number
of placements divided by total number of days,
exclusive of
Sundays.
Data for 1931
are for the first
eleven months of
the year.
0/
Data for 1932
are for the first
ten months of the
year.
Seasonal Variation in Employment
Data, on seasonal variation of employment in the production division
of the Industry, which are presented for the years 1929 and 1933 in Table
XIII, show relatively low employment in the first four months of each yea.r.
Production for the summer selling season begins around May, and producers
usually attempt to start work on special features at that time in order
to further their sales efforts. In 1929 and 1933 employment was higher in
the last six months of the year, with maximum employment occurring in
September.
Table XIII also shows that during the last four months of 1933, enploy-
ment was generally about 15 per cent higher than in 1929. This increase
may be partially attributed to a decrease in hours and subsequent increase
in the number of wage earners under the "President's Re-employment Agreement.
8976
-15-
TABLE XIII
Number of Wage
Earners, by Month
s, 1929 and
1933
J. U Cj tJ
1933
Month
Index
Index
Number
(Annual av-
Number
(Annual av-
erage=100)
er age= 100 )
J anuary
9,929
92
9, 592
89
February
9, 694
30
9, 567
89
Ms.rch
9,113
84
8, 592
80
April
9, 560
89
8, 547
79
May
10, 722
99
7, 880
73
June
10,805
100
9,212
85
July
11,422
106
10,491
97
August
11,616
108
11,821
110
September
11,938
111
13,734
127
October
11, 506
107
n r-7 /Tin
13, 627
12b
November
11,690
108
13,310
124
December
11,407
106
12,947
120
Average
10,784
100
10,777
100
Source: Census of Manufactures, 1929 and 1933, "Motion Pictures,
not Including Projection in Theatres."
Total Annual Wages
Table XIV shows the total salaries and wages paid in 1929 and 1933
as reported by the Census of Manufactures. Comparison of the years 1929
and 1933 indicates that the reported total compensation decreased from
$85,028,000 to $71,343,000, or 16 per cent, salaries decreased approximate-
ly 12 per cent, and wages dropped about 26 per cent. The decline in total
salaries was accompanied by a somewhat smaller decrease in the number of
salaried employees, but since the 26 per cent decline in total wages was
accompanied by practically no change in the number of wage earners, there
must have occurred marked cuts in wage rates and/or a considerable substi-
tution of part-time for full-time workers. (See Table XI, above.)
It may also be seen from Table XI? that salaried employees enjoyed
a larger proportion of the total compensation in 1933 than in 1929. Salaries
represented approximately 71 per cent of the total compensation in 1929 and
about 74 per cent in 1933, while wages as a percentage of total compensation
decreased from about 29 per cent to approximately 26 per cent.
8976
— —
-16-
TABLE
XIV
Total Annual Salaries
and TTages, 1929 and 1933
1929
1933 Per Cent
Kind , . _ _ .
„ _ , . Amount Per Cent
oi Conroensation / „ . \
1 (000:s) of Total
Amount Per Cent igggfigSS
(000 5 s) of Total
Total $85,328 100,0
$71,343 100.0 - 16.1
Salaries 60,163 70,8
Wages - 24,860 ^9.2
52,948 74.2 - 12.0
18,395 25o8 - 2b. 0
Source: Census of Manufactures, 1933
, ]] Mot ion Pictures, not Including
Projection in Theatres."
Annual Wages "by Principal States
Ta"ble XV" shows the annual wages paid in 1929 and 1933 in the three
principal producing sta.tes. California accounted for 79 per cent of the
total in 1929 and 64 per cent in 1933. Hen York declined in importance
from 1929 to 1933, for it accounted for 15 per cent of the total in 1929
"but only 11,5 per cent in 1933.
TABLE
XV
Annual Wages,, "by Three Principal States,
1929 and 1933
1929
1933
State Wages
(000' s)
Per Cent Wages Per Cent
of Total (000' s) of Total
U. S. Total $24,860
100.0 $18,395 100.0
California 19,584
New York 3,649
Illinois 216
78.8 15,460 84.0
14.7 2,111 11.5
.9 185 1.0
Total, 3 States 23,449
Total, Other States 1,411
94.4 17,756 96.5
5.6 639 3.5
Source: Census of Manufactures, 1929
and 1933, "Motion Pictures,
Not Including Projection in
Theatres."
Salaries and 7ages as a Per Cent of Cost of Production
Table XVI shows the per cent of
total cost of production spent for
wages in 1929 and 1933. The 1929 wage cost of $24,860,000 dropped to
$18,395,000 in 1933, but as a per cent of total cost of production, it
8976
-17-
increased fron 13.5 per cent in 1929 to 15.4 per cent in 1933, or a gain
of 14 per cent. While the annual salaries paid in 1929 decreased from
$60,168,000 to $52,948,000, the -per cent of total cost of production which
these figures represent rose from 32.7 per cent in 1929 to 44.4 per cent
in 1933 or a gain of 36 per cent,
TABLE XVI
Total Cost of Production, Annual Salaries and Annual Wages
1929 and 1933
Year Total Cost of Total Salaries and Salaries Wage;
Production Wages
(000's) Amount Per Cent of Amount Per Cent Amount Per Cent o?
Total Cost (000' s) of Total (000's) Total Cosi
Cost
1929 $184,102 $85,028 46.2 $60,168 32.7 $24,860 13.5
1933 119,343 71,343 59.8 52,948 44.4 18,395 15.4
Source: Census of Manufactures, 1933, "Motion Pictures, Hot Including
Projection in Theatres'1.
Wages of Extras
Table XII above indicates the average wage per extras placed "by the
Central Casting Corporation. These figures were derived "by dividing the
total annual wages by the total number of placements. It must be understood
that the average \7age per placement as shown does not represent the average
wage of all registered extras, but merely of those placed by this particular
agency.
Table XVII indicates the reduction between 1930 and 1933 in the number
of extras, as placed by the Central Casting Corporation who received high
daily wage rates. In the former year three-fourths of the placements re-
ported in the table received $10.00 per day while in 1933 only one- third were
placed at this rate. The number receiving daily wages of $5.00 increased
from 24 per cent to 40 per cent while the number in the $3.00 wage class in-»
creased from .1 of one per cent in 1930 to 27 per cent in 1933.
8976
-18-
TABLE Mil
Distribution
of Placements
of Extras by
the Central Casting Corporation
at
Specified Daily Wage Hates
, 1930 and 1933 a/
1930
1933
Daily Wage
Number
Per Cent
Humber b/
Per Cent
Rate
of Total
of Total
Total
143,209
100.0
126,934
100.0
$3.00
206
.1
34, 386
27,0
5.00
34,075
23.8
51,102
40.3
10.00
109,128
76.1
41,446
32.7
Source: Transcript of ERA Hearing, Motion Picture Industry, September 12, 1933
a/ The number of placements does not represent the total number of
extras placed, but covers only those placements made at the wage
rates shown.
b/ Estimated by prorating the placements for the first half of 1933.
Average Hourly Wage Hate
There are no accurate average figures available which represent the
composite hourly wage rate for all classes of wage earners in the production
division of the Industry/-. The minimum hourly wage rate specified in the Code
for all classes of employees was 40 cents. The range in minimum rates for
various classes of studio mechanics and laboratory workers was from 60 cents
to $2,25 per hour. Reports of the Research and Planning Division of KRA
and from the Division Administrator's Office have indicated that the Code
rates represented an estimated increase of approximately 15 per cent over the
1929 rates. It is believed that the increases applied main^ in the lov/er
wage brackets, where labor is largely unorganized.
Average Hours Worked per Week
Table XVIII gives the prevailing hours of labor per week in the pro-
duction division of the Industry for the year 1929. More than 60 per cent
of the total number of establishments worked their employees "between 45 and
48 hours per week. The total number of wage earners in this group amounted
to 86 per cent of the total number of wage earners. Only ,1 of one per cent
of the wage earners worked 48 hours or more per week.
8976
-19-
TABLE XVIII
Number of Establishments and lumber of Wage Earners,
Classified by Number of Pull-Time Hours Worked
per Week, 1929
lumber of Hours
per Week
Total
40 hours or less
40 - 45 hours
45 - 48 hours
48 hours or more
Establishments
Per Cent
Number of Total
135
5
41
82
7
100.0
3.7
30.4
60.7
5.2
Wage Earners
Number
10,742
100
1,357
9,278
7
Per Cent
of Total
100.0
.9
12.6
86.4
.1
Source: Comoiled from Census of Manufactures, 1929, Vol. I, Table VI,
"Motion Pictures, not Including Projection in Theatres".
Child Labor
Child labor is not an important problem in the Industry. In 1930,
2,213 helpers in motion picture production were reported by the occupation
statistics of the Census of Population, but only 93 of these helpers were
between the ages of 10 and 17 years. It must be borne in mind that these
data refer not to the number actually employed, but rather to the number
reporting themselves as belonging, by occupation, to this Industry.
Employees by principal States
Total Employees. - Table XIX shows the average annual number of salaried
employees and wage earners by three principal states for 1929 and 1933. There
was an increase in California from 77,4 per cent of the total in 1929 to 85,2
per cent in 1933, a gain of 11 per cent, New York showed a large decrease,
from 14.5 per cent of the total to 9,2 per cent, or a loss of 36 per cent.
These two states alone employed over 90 per cent of the workers in each of
these years,
TABLE XIX
Average Annual Number of Employees, by Three Principal
States, 1929 and 1933 a/
1929 1933
State Number Per Cent Number Per Cent
of Total of Total
U. S. Total
19,602
100.0
19,037
100.0
California
15,167
77.4
16,417
86.2
New York
2,850
14.5
1,748
9.2
Illinois
202
1.0
162
.9
Total, 3 States
18,219
92.9
19,037
96.3
Total, Other States
1,383
7.1
710
3.7
Source: Census of Manufactures, 1929 and 1933, "motion Pictures,
not Including Projection in Theatres".
qq^Jq Includes wage 'earners and salaried employees.
-20-
Wage Earners. - Ta"ble XX shows wage earners, by principal states,
for 1929 and 1933. In 1929 California accounted for 74.6 per cent of total
wage earners; in 1933, 83,7 per cent, representing a gain of 12 per cent.
New York again showed a large decline from 15.7 per cent of the total to
10.7 per cent, or a loss of about one-third. These two states alone employ
ed more than 90 per cent of the wage earners in 1929 and 1933.
TABLE XX
Average Annual lumber of Wage Earners, by Three
Principal States, 1929 and 1933
1 QPQ
1933
State Number of
Per Cent
Number of
Per Cent
Wage Earners
of Total
Wage Earners
of Total
U. S. Total 10,784
100.0
10,777
100.0
California 8,052
74.6
9,022
83.7
New York 1,695
15.7
1,149
10.7
Illinois 82
•8
108
1.0
Total, 3 States 9,839
91.1
10,279
95.4
Total Other States 955
8.9
498
4.6
Source: Census of Manufactures,
1929 and 1933,
"Motion Pictures,
not Including Projection
in Theatres."
8976
-21-
PABT II: PIOHJCTIOI
Chapter III. Materials
Cost of principal Materials Used
The principal material used in the production division of the
Industry is raw film, purchased from the Eastman Kodak Company, the
Dupont Film Manufacturing Corporation and from a few foreign countries,
principally Germany, France, and. England.
Table XXI shows the total cost of materials, fuel, and purchased
electric energy used "by the production division of the Industry in 1929,
1931, and 1933. This cost averaged about 21 per cent of the total cost
of production in each of the years shown.
TABLE XXI
Total Cost of production and Cost of Materials,
Fuel, and Purchased Electric Energy
Cost of Materials, Fuel,
Total Cost of and Purchased Electric Energy
Year Production Amount Per Cent of
(OOOi s) (000' s) Total Cost
1929 $184,102 $38,441 20.9
1931 154,436 32,222 20.9
1933 119,343 25,153 21.9
Source; Census of Manufactures, 1933, "Motion Pictures, not Including
Projection in Theatres,"
a/ Materials consist of miscellaneous studio supplies and
containers for films.
Source of Equipment and Supplies
Table XXII shows the number of establishments producing photographic
apparatus and supplies by states for 1929, 1931, and 1933. It must be
understood that these data pertain to the entire production of such material
and not just to that used by the Motion picture Industry.
8976
~22~
TABLE XXII
Number of Establishments Producing Photographic
Apparatus and Supplies, "by Principal States
States 1929 1931 1933
U. S. Total
115
110
84
California
11
8
5
Illinois
21
24
17
Indiana
3
4
o
Massachusetts
4
3
a/
I.Iichigan
3
2
3
Minnesota
4
3
ay
Missouri
8
7
5
Hew York
35
32
ay
Ohio
5
3
3
Pennsylvania
14
14
7
Total, 10 States
108
100
43
Total, Other States
7
10
41
Source: Census of Manufactures, 1929, 1931, and 1933, "Photographic
Apparatus and Supplies." Census data do not include estate
lishments having an annual production of less than $5,000,
a/ Hot reported separately in 1933.
8976
PART II: PRODUCTION
Chapter IV. Unfair Trade Practices
Enticenent of Talent and Activities of Agents
The problem of salaries of stars and the activities of agents are the
only two significant trade practice problems which may be clearly allocated
to the production division of the Industry.
This division centers about a relatively small group of personalities
— such as actors, directors, writers, and technicians — who have become
known through advertising, publicity, and other methods. The removal of a
personality often seriously disrupted production until a suitable replace-
ment could be found or developed.
Hew companies usually found it more profitable to employ talent
already developed and secured such individuals by offers of higher salaries,
Long-term contracts did not solve the problem of "star-raiding, " because
competing exhibitors, desirous of acquiring the services of such talent,
induced the breaking of existing contracts. Moreover, offers of higher
salaries from competitors unquestionably produced psychological effects
which tended to decrease the quality of the stars' work and in extreme
cases rendered them worthless. Complete contentment necessary for quality
work was usually reestablished only when the employer equalled the com-
petitive offer which, in some cases was not definite enough properly to
be called an offer.
8976
■ i
~ 24 ~
PART II: PRODUCTION
Chapter 7. General Information
imports
(Table XXIII shows the exports of total linear feet of film for the
years 1929 through 1934, 2Jo figures are available on the value of such
films other than the declared value, which is based largely on quantity
rather than on exhibition value.
TABLE XXIII
Exports of Motion Pictoe films, 1929-1934 aj
( In thousands )
Year Total Linear Feet
1929 282,216
1930 274,251
1931 199,690
1932 160,773
1933 164,537
1934 194,434
Source: hot ion Picture Almanac; as prepared by the Bureau of Foreign
and Domestic Commerce.
a/ Includes negative and positive sound and silent films.
Advertising
The Motion Picture Almanac has estimated that the Industry as a
whole spends $70,000,000 annually for advertising in newspaper, magazines,
billboards, radio, and other media. No figures are available relative to
the amount spent by the producers.
Productive Capacity
Hb adequate measures of the productive capacity of the Industry
exist. Production schedules are determined largely by the demand from
the exhibition division.
Trade Associations
Motion Picture Producers and Distributors of America, Inc. (MPPDA). -
This organization, of which Will H. Hays is President, was formed in 1922.
It is composed of more than twenty companies, including the so-called
"Big 8" producers and distributors. It furnishes information on all Industry
8976
- 25 -
matters and serves as a coordinating agency in industrial relationships
and functions as interpreter of problems and policies of public interest.
It also represents the Industry in connection with all sorts of "anti"
legislative measures which are a constantly recurring plague to the Indus-
try. Its members find it an economical means of gathering useful infor-
mation, and of securing necessary services and facilities.
The Academy of Hot ion Picture Arts and Sciences.. - This organization
which is a guild-like association of the production "branch of the Industry*
was organized in 192? to deal with production problems. The Academy is
controlled and financed by the producers. It has provided methods of
adjustment and reconciliation among producers as well as between producers
and their various classes of employees. It has attempted to "bring about
industry-wide technical coordination by educational campaign's designed to
reach all concerned therein, and has served as a clearing house for the
collection of technical data in production. Its public-relations efforts
have been focused towards contacting surve3^ experts, special organizations,
and manufacturing and research concerns, rather than the press and the
public.
Trade Union Activity
The Actor's Equity Association which is chartered by the Associated
Actors and Artists of America and affiliated with the American federation
of Labor has jurisdiction in the motion picture field. Its offices are
located in Hew York, Chicago and Hollywood. In 1933, the Association had
1,418 memhers. These consist of both actors and actresses who had received
screen credit (i.e. listing in cast of pictures) or professional recognition.
8976
-26-
PART III: DISTRIBUTION
Chapter I. The Nature of the Division
History and Scoioe of Division
Origin of Film Exchange. - Daring the Industry's formative stages, films
were purchased outright fron producers and exhibited until worn out or until
they ceased to he profitahle. This system later gave way to a more efficient
and economical method of distribution known as the film exchange, which was
introduced in IS 02 "by Harry J. Miles of San Francisco. This system originated
in the functions of maintaining film stocks, which requires the supervising
and physical transportation of film, and the inspection and repair of damaged
film. The film exchange is in essence a licensing system whereby the films
remain the property of the exchange, and the exhibitor merely obtains a license
to show a particular film in a designated theatre for a stip.ula.ted period of
time, at a charge equal to about half the purchase price.
Developments in Film Distribution. - In the early stages, positive films
were sold by length on a flat footage basis regardless of the individual pic-
ture, actor, or director. No consideration was given to the number of picture;
leased, character and size of theatre, and the population of the town or city.
There were no distinctions made between first or subsequent runs.
The distributors developed what was known as the "program system," supply?
ing the exhibitor with a constant flow of two or three-real pictures, two or
three time per week, The public appreciation for better-quality films gave
rise to the "star" system, and demands for longer programs featuring such star
Pickford, Hart, and Sermett • The exploitation of stars and concomitant effort
to attain quality by purchases of expensive scenarios and production extrava—
ganda brought on the full-length feature, absorbing the greater part of the
entertainment program. Rising production costs led to an upward revision of
leasing charges and eventually to the general adoption of a policy of block
booking by the distributors,
Another development was the construction of theatres exclusively for the
showing of motion pictures, displacing arcades, shooting galleries, and empty
stores as well as legitimate and vaudeville theatres.
With the development of the "star" and the "feature" system which gave th
pictures individuality, and the construction of theatres exclusively for motio:
pictures which resulted in more efficient and economical presentation, distri-
butors began to vary the prices of pictures according to their estimated value
Pictures were no longer sold at random on a flat footage basis. Wider geo-
graphical distribution came to be considered necessary since it was found that
first showings usually exhausted considerable exhibition value of a -picture
in localized areas. Thus nation-wide facilities for merchandising, rehandlin§
and servicing a product, which varied in price and quality, became necessary.
National and "State Right" Distribution. - The first effort to attain
effective national distribution was made by the formation in 1910 of the Gener»
al Film Company, controlled by the liotion Picture Patents Company. Independent
producers, who were not permitted to use these facilities, distributed chiefly
through independent distributors. These distributors, who were scattered
8976
throughout the country, operated on a "state right" basis. The state right ex-
changes "bought films outright or more comripnly leased films with the exclusive
right of redistributing then to exhibitors within certain geographical areas.
host state right distributors were also exhibitors whose original purposes
were to obtain films for their own theatres, their interest in complete distri-
bution being often less than casual, Moreover, since no producer could supply
sufficient product to furnish the entire requirements of the average exhibitor,
state right distributors were naturally interested in obtaining films from more
than one producer, and this diversity of interest usually resulted in mediocre
sales, service and maintenance efforts from the point of view of the producers.
Aggressive selling efforts necessary for intensive distribution were lacking*
Rentals received from films were not believed to be commensurate with their
earning power. The producer, on the other hand, could not set prices for the
distributors1 subleasing of film but received what the latter would pay for it.
He usually found out a picture's value in a given territory after it was too .
late to capitalize on it.
Producers as Film Distributors. - Unlike conditions in the manufacturing
industries, the cost of the production of a motion picture has usually little
direct relation to its sales value* Consequently the producer soon realized
the great importance of obtaining proper control of distribution. Integration
with production was inevitable since producers were placed in the position of
having the value of their product determined to a large extent by distributors.
Consequently, producers with sufficient financial resources generally pursued
the policy of obtaining control of distribution.
Present-Day Film Distribution. - The actual process of distribution in-
volves the licensing of the exhibitor to show copy— righted film, assigning play-
ing dates, physical distribution of films to theatres, and the collection of
accounts. Advertising material for the pictures to be shown is usually sold in
conjunction with the licensing of films. Exchanges are located in key cities
throughout the United States. The 50 to 250 positive prints made from the ex-
posed negative are distributed to first-run, second-run, and subsequent-run
theatres in proper order and point of time according to contractual specifica-
tions*- Rental variations extend from as low as $5 per day to several thousand
dollars per week, while percentage agreements may call for 10 per cent to 50
per cent of the box office receipts. Combinations of both forms are not un-
common. Another arrangement sometimes used allows the exhibitor a svn to de-
fray current operating expenses and the surplus is then split according to
agreement. The rental charge is governed primarily by the exhibitor's ability
to pay, which, in turn, depends upon a variety of factors, chief among which is
the estimated box-office receipts, based upon previous experiences with the
star and cast in some comparable vehicle. Other factors are seating capacity,
number of performances per day, price of admission, character of accompanying
presentation, prestige of the theatre, and efforts made for exploitation.
All the "major" companies maintain distributing establishments in "key"
centers throughout the United States. Small independent producers often dis-
tribute their films through the facilities of the large producer-distributors,
Total Humber of Exchange Establishments
The total number of exchange establishments in 1929 was reported by the
Census as 533. (See Table XXIV, Below).
8976
-28-
Number of Exchange Establishments by Principal Sto.tes
Table XZCV shows the distribution of the 533 exchanges by six principal
states in 1929, Hew York accounted for almost 16 per cent of the total number,
California .and Pennsylvania each had more than 6 per cent. Ohio, Massachusetts
and Illinois follow in the order mentioned, each having about 4 per cent of the
to tod number of exchanges within their borders. The six states accounted for
42 per cent of the total number for the country.
TABLE ZHV
Iluaber of Exchanges and Volume of Business Handled, by
Six Principal States, 1929
Exchange s Volume of Business
State lumber Per Cent Amount Per Cent
of Total (OOO's) of Total
U. S. Total
533
100.0
$220,605
100.0
California
36
6.8
16,057
7.3
Illinois
21
o • 9
14,952
6.8
Massachusetts
23
4.3
13,283
6.0
New York
85 a/
15.9
51,581
25.4
Ohio
25
4.9
13,326
6.0
Pennsylvania
34
6.4
25,097
11.4
Total, 6 states
225
42.2
134,306
50.9
Total, Other States
308
57.8
85,299
39*1
Source: Census of Distribution, 1929 "Motion Picture Films" (Trade Series,
Distribution No. 7-201).
a/ Includes 14 export exchanges.
Volume of Business b" Principal States
Table EXIV, obove also shows the volume of business done by these six
principal states in 1929. New York, which had the largest number of exchanges
accounted for more than 23 per cent of the total exchange business (including
exports by the 14 New York City exchanges which engaged in export business
exclusively.) Pennsylvania was the second most important state in 1929, .ac-
counting for aboiit 11 per cent of the total business; California accounted for
7 per cent of the business; and Illinois, Massachusetts, and Ohio, averaged a
little more then 6 per cent each.
It is noteworthy that these six states containing less than 38 per cent
of total population of United States accounted for more than 60 per cent of th<
total volume" of the motion picture distributing business.
8976
-29-
Number of Establi shments b:-- Type of Exchange
TTith the development of large chain theatres, the vertical integration of
producers with theatre chains, and the growing financial strength of producing
companies, the independent distributor has "become less significant. Producers
now either associate with existing distributors or more often establish their
own distinct exchanges. In 1929, according to Table XXV, producers exchanges
totalled 444 in number or 83 per cent of the total. Next in irrportarce to the
exchanges owned "by producers were the independent" exchanges, comprising 14 per
cent of the total. The export exchanges numbered 14, or less than 3 per cent
of the aggregate, and 4 of these were owned by producers*
TABLE XXV
Number of Exchanges, and Number of Employees, by
Principal Types of Exchanges, 1929
Type of Exchange
Item Total Producer Independent Export
Number Per Cent Number Per Cent Total' Per Cent Total Per Cent
of Total of Total Amount of Total .Amount of Total
Number of
Exchanges. 533 100.0 444 83.3 75 14.1 14 2.6
Number of
Srroloyees 9342 100.0 8797 94.2 393 4.2 152 1.6
Source: Census of Distribution, 1929, "Motion Picture Films" (Trade Series,
Distribution No. H7-201.)
Volume of Business "D'~ Tyoe of Exchange
Table XXVI shows that in 1929 the producers exchanges did most of the
business, for they accounted for 95 pei cent of the total. Furthermore, the
4 export exchanges owned by the latter contributed an additional $5,318,000
worth of business or almost 2.5 per cent of the total volume.
Next in importance to the exchanges owned by producers were the export
exchanges which carried on a business amounting to 3 ;oer cent, 22j per cent of
which, as mentioned above, was done by the 4 exchanges owned by the producers.
The independents accounted for only about 2 per cent of the total.
8976
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PART III; DISTRIBUTION
Chapter II. Labor Statistics
Average Annual Number of Employees
Census data as presented in Table XXVII place trie average annual em-
ployment of all exchanges at 9,342 in 1929. Of these, about 20 per cent
were executives or salesmen.
Total Number of Employees by Types of Exchanges
As shorn, in Table XXV, above, producers' exchanges reported 8,797,
or 94 per cent of the total number of employees. Independent exchanges
employed 4 per cent, and the export group accounted for less than 2 per
cent of the total.
Average Annual Payrolls
According to Table XXVII, the average annual payroll covering all
employees was $17,978,000 in 1929, Executives, who constituted less than
4 per cent of total employees, received almost 14 per cent, while the
salesmen, amounting to 17 per cent of the total number, received 35 per cent
of the total payroll. The remaining employees, who constituted almost 80
per cent of the total employees, received 51 per cent of the total payroll.
TABLE XXVII
Average Annual Number of Employees and Average Annual
Payrolls, 1929
Kind of
Employee
Employees
payrolls
Number
Per Cent
of Total
Amount
(000» s)
Per Cent
of Total
Total
9,342
100.0
$17,978
100.0
Executives
335
r7
O. O
2,468
13.7
Salesmen
1,562
16.7
6,253
34.8
Other Employees
7,445
79.7
9,257
51.5
Source: Census
of Distribution, 1929,
"Motion Picture
Films" (Trade
Series, Distribution No. 1,7-201).
Per Cent Salaries and Wages are of Total Expense
In 1929 salaries and wages constituted the largest single item of
expense, amounting to about one-half of total expenses for all types of
exchanges. In both the producer and independent type of exchange, total
salaries and wages accounted for about one-half the total expenses, but
in the export exchanges, this percentage was somewhat less. (See Table
XXVI, above.)
8976
-32-
PART III: DISTRIBUTION
Chapter III. Unfair Trade Practices
Block Booking and Blind Booking.
"Block "booking" and ""blind "booking", which involve the purchase of films
sight unseen, has long been existent in the Industry. Producer-distributors
have maintained that this method is economically sound, inasmuch as it assures
exhibitors a continuous supply of films while at the same time stabilizing
production. Individual selections, it has been claimed, would result in'
prohibitive license fees, since all pictures are not box-office successes •
The impossibility of pre- judging box-office attractions has also been pointed
out.
The opponents of block booking and blind booking, who are mostly indepen-
dents, have claimed that these practices have forced them to show undesirable
pictures These independents have had the sup-oort of social, religious, and
educational organizations which have realized that independents would probably
be ruined financially if they were to refrain from showing, yet be forced to
pay, for all unendorsed pictures.
The "right to buy" controversy appears to have been concerned primarily
with preferential master contracts existing between oroducer-exhibitors.
It has been alleged by independents that certain producer-exhibitors having
competition in a specified area are given unfair advantage by being permitted
to purchase films of other producer-exhibitors at lower prices than those
at ^which the former's competitors are permitted to buy — if they are permitte
to bu^/ a"k all* In return the latter producer-exhibitors received this low
rate preference from the former when they have competition from independents
in their areas.
Independents who have thus been unable to compete with the large circuit
and producer-affiliated theatres for the purchase of first-run pictures
have been at a further disadvantage because of the fact that these producer-
affiliated theatres have exchanged their playing time among themselves. This
has resulted in forcing the independents to show subsequent run pictures.
Hhile exhibitors have sought the "right to buy" first runs irrespective
of the character of theatre, location, size, quality of accompanying presen-
tations, or prestige and standing enjoyed in the community, producer-distrib-
utors have claimed the "right to choose" their customers. They have sought
to bring out their features under the most favorable auspices in theatres
having established reputations and the best and finest quality presentation
in the country. They claimed the right to determine the factors that go into
a bargain, such as the financial responsibility of the buyer.
It is- generally understood by the independents that the "right to choose1,
customers, provided no collusion exists, has been found justified by the
Federal Trade Commission, as shown by the following quotation from Federal
Trade Commission versus Paramount Famous Players Corporation, 57 Fed. 152:
"A distributor of films by lease or sale has the
right to select his own customers and sell such
-33-
quantities at given prices, or to refuse to sell at all
to any particular person for reasons of his own.
Federal Trade Commission versus Raymond Bros. -Clark Co.,
263 U. S., 565; U. S. versus Colgate, 250 U. S. , 30;
Great A & P versus Cream O'^heat, 227 Fed. 46 (C.C.A.2),"
Forcing Short Subjects with Features
Forcing the purchase of short subjects as a condition for contracting
of features has been a long-established -oractice in the Industry. Exhibitors
have claimed that in some instances requirements were exacted which forced
them to buy more shorts than they could reasonably be expected to show. Dis-
tributors have contended that this was a long-established selling method and
that their investment was based upon the "tying in" of the sale of short
subjects. They have claimed further that the cost of features was directly
related to the total sales made and that interference with the usual practice
would result in an increase in the cost of features. Distributors claimed
moreover, that they were providing the exhibitors with a well-balanced program.
Overbuying
It has been generally admitted that certain financially well-entrenched
exhibitors have sometimes contracted for more motion pictures than they
reasonably required for exhibition in their own theatres with the intent of
depriving a competing exhibitor from securing sufficient pictures for exhibi-
tion in his theatre. This practice has been generally recognized by the
Industry as unfair.
8976
- ■ ■■ ■■■
~34~
PART III: DISTRIBUTION
Chapter IV. General Information
Trade Association Activity
Film Boards of Trade, which. . constitute local distributor trade
association, were established in 1922 as the field organization of the
Motion Picture Producers and Distributors of America, These "boards exis
in 32 key city exchange centers.
The Film Boards keep sales managers advised of changes in theatre
ownership. During the transition period from the silent to the sound
pictures, the Boards supplied distributors with information relative to
the equipment used tj various exhibitors. The Boards also locate lost
and stolen films, check up on "nissouts, " determine responsibility for
film mutilations and delayed returns of prints, and attend to various
other routine matters in the interest of their members.
8976
PAHT IV: EXHIBITION
Chapter I. The Nature of the Division
History and Description of Division
/The Development of Motion picture Theatres, - The exibition division of the
i.lotion Picture Industry corresponds to the retail "branch of manufacturing in-
dustries. It started with the "store-room" shoTT, composed of short-reel en-
tertainment with 5 cents as an admission charge. The seating capacit3r of
these "store-rooms" was anywhere from 100 to 200. At a later date the seating
capacity at "store-room" shows was enlarged from 200 to 300, and the enter-
tainment program was lengthened. The -orice of admission was then raised to
10 cents.
Construction of buildings in great numbers, for the exclusive purpose of
showing moving pictures soon followed. The seating capacities of these movie
houses ranged from 300 to 600, and again the entertainment was lengthened and
the price of admission increased, this tine to 20 cents.
At this point, promoters entered into the business and adopted various
methods of obtaining capital with which to build lavish theatres, some of which
had seating capacities ranging up to 5,000 seats. The "building of these large
"de luxe" theatres on a grand scale required substantial public financing,
which meant that the promoters had to turn to bond issues and eventually to
"Tall Street for the necessary financing.
The Development of the^Entertainment Program. - The construction of de
luxe theatres required more lavish motion pictures in order to operate the
picture hous^ s prof it ably , and it thus "became necessary for theatre owners from
different parts of the country to combine into operating units so as to obtain
high-class entertainment to which they hoped to attract capacity audiences.
As the size of the theatres was increased, programs were expanded to include
additional entertainment, such as "presentations" consisting of symphony
orchestras, ballets, and headline vaudeville acts. At the same time, the price
of admission was increased to offset the added expense involved.
Entrance of Producers into the Exhibition Division. - The motion picture
theatre owners almost from the beginning, formed cooperative buying groups in
order to buy picture films for their theatres and to control if possible,
prices and playing time,. The producers were sometimes required to sell at
prices which these groups were willing to pay or else not sell at all. Finally
to meet this situation, producers of motion pictures entered into the exhibi-
tion field, while the great majority of the theatres are operated by indivi-
duals and by independent chains a large proportion of the most important
theatres is controlled by the producer-distributors.
Classes of Exhibitors^ - The exhibition division of the Industry today is
composed of three classes of exhibitors; namely affiliated, unaffiliated, and
independent. Affilitated exhibitors include those operating a number of
theatres, commonly called circuits, which are owned or controlled by the pro-
ducer-distributors. Unaffiliated exhibitors include those who operate a cir-
cuit of theatres but have no connection with producer-distributors. The re-
maining exhibitors are called independents, (See Table XXXI, below.)
8976
Total Number of Theatres.
As shown in Table XXVIII, the Film Daily Yearbook reported 16,885 motion
picture theatres in the United States in 1934.
Number of Theatres by Principal States
While production of motion pictures is highly concentrated in a fen states,
the market for films, which consists of all exhibiting theatres in the United
States, is widely scattered. Table XXVIII indicates the distribution of
theatres by principal states in 1934. The state of New York was the most im-
portant in 1934, for it reported 9 per cent of the total number of theatres,
Pennsylvania, and Ohio followed in close order having 6.6 per cent and 5,7 per
cent respectively, California, which is the principal producing state, con-
tained about 5 per cent of all theatres,
TABLE XXVIII
Number of Motion Picture Theatres, bjr Principal
States, 1934
State
Number of Theatre
s Per Cent of Total
U. S. Total aj
16,885
100.0
California
875
5 ?
Illinois
965
5.7
Indiana
573
3.4
Iowa
458
2.7
Kentucky
420
2.5
Massachusetts
499
3.0
Michigan
570
3.4
Minnesota
421
2.5
Missouri
523
3.1
New Jersey
427
2.5
New York
1,539
9.1
Ohio
985
5.8
Pennsylvania
1,121
6,6
Texas
930
5.5
Wisconsin
484
2.9
Total, 15 States
10,790
63.9
Total, Other States
6,095
36.1
Source: Film Daily Yearbook of Motion Pictures
, 1934.
a/ This total figure
does not agree with
the total given by the Motion
Picture Producers
and Distributors of
America which report 18,371 as
shown in Table XXXI below.
8976
-37-
Number of Theatres Open and Closed
Table XXIX shows the total number of theatres from 1929 through 1935, and
from 1932 on; the data are "broken down to show the number open and closed. It
will be noted that in 1952, 4,627 movie houses out of a total of 20,100, or al-
most 25 per cent, were closed. However, only 797, or 17 per cent, of those
closed were sound-equipped theatres. In 1S33, out of a total of 19,311
theatres, 5,895, or about 30 per cent, were closed, of which 2,170, or almost
37 per cent, were equipped with sound. The over-exoansion in the number of
theatres, their construction in unsuitable locations as real estate promo-
tions, and the attendance by the public at the finer theatres only, resulted
in the closing of a large number that had become obsolete or should never have
been built.
Although the proportion of closed thea.tres decreased from 1932 to 1935,
the relative number of closed sound-e quipped theatres had increased. However,
it must be borne in mind that the proportion of sound- equipped movie houses to
the total has been increasing since 1929, until in 1935 these houses constitu-
ted almost 90 per cent of all theatres.
Seating Capacity
Table XXX shows the total number of seats in motion picture theatres
during the years 1931 through 1935. Since 1933, the number has remained, re-
latively constant at slightly more than 11 million.
The potential seating capacity of the Industry may be obtained by com-
bining with the actual number of seats the average number of shows per day.
Since some theatres give at least two shows per day, and most of them probably
three or four shows per day, the potential daily capacity would be at least
two or three times the actual number of seats.
8976
-38-
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8976
TABLE XXX
Total Number of Seats in Motion Picture
Theatres, 1931-1935 a/
Date
Number or Seats b/
1931
12,143,761
1932
10,767,000 c/
1933
11,161,193
1934
11,028,950
1935
11,132,595
Source: Data for 1931, 1932, and 1933 from Motion
Picture Almanac, 1953, p. 6; for 1932 as
indicated in footnote _c/; for 1933, 1934,
and 1935 from Film Board of Trade Reports.
a/ As of January 1, each year; includes open
and closed theatres.
b/ It will be noted that the total number of
seats is not identical with those given by
the source cited in Table XXXII, below.
cj Standard Statistics Company, Standard Trade
and Securities, "Theatres and Motion Pictures,"
Vol. 75, No. 22 (February 20, 1935), p. TH-46.
Number of Theatres and Number of Seats Classified by Type of Ownership
Although, as shown in Table XXXI, affiliated circuits owned on an average
about 11 per cent of the total number of theatres during the years 1933-1935,
they owned or controlled about 25 per cent of the total number of seats, as
shown in Table XXXII. This indicates that this group owned large theatres.
The unaffiliated circuits avera.ge about 16 per cent of the number of theatres,
but they represent approximately 23 per cent of the total seating capacity.
Theatres of large seating capacity are also found among the unaffiliated cir-
cuits, but independents, who ovm or control aoproximateljr 72 per cent of the
total number of theatres, account for a little more than 50 per cent of the
total seating capacity.
This is significant because of the competition within the Industry between
these three groups. The unaffiliated circuits are usually well entrenched and
in a powerful bargaining position in the purchase of films. The independents,
who are widely scattered, are usually in a. relatively poor bargaining position
when their theatres happen to be located in close proximity to the affiliated
or unaffiliated circuits. Independents located in non-competitive areas, how-
ever, are often in good bargaining positions in the purchase of films.
8976
-40~
TABLE XXXI
Number of Motion Picture Theatres, Classified "by Type
of Ownership, 1933-1935
Total Circuit Theatres Independent Theatrec-
Year Numher Per Cent Affiliated Unaffiliated
of Total Num- Per Cent Num- Per Cent Numher Per Cent
her of Total her of Total of Total
1933 19,251 100.0
1934 18,371 100.0
1935 18,263 100.0
2,266 11.8 3,189
1,954 10.6 2,846
2,073 11.4 3,070
16.6 13,796 71.6
15.5 13,571 73.9
16.8 13,120 71,8
Source: Motion Picture Producers and Distributors of America, Inc., as of
January 1, each year.
TABLE XXXII
Number of Motion Picture Theatre Seats, Classified "by Type
of Ownership, 1933-1935
Tear To tal ^ Circuit t Independent
Numher Per Cent Affiliated Unaffiliated Num- Per Cent
(000* s) of Total Theatres Theatres m her of Total
Hum- Per Cent Mum- Per Cent (000's)
her of Total her of Total
(000' s) (000' s)
1933 11,086 100.0
1934 11,029 100.0
1935 11,032 100.0
2,938 26.5 2,562
2,587 23.5 2,493
2,719 24,4 2,539
23.1 5,586 50.4
22.6 5,949 53.9
22.8 5,874 52.8
Source: Motion Picture producers and Distributors of America, Inc., as of
January 1, each year.
a/ It will he noted that the total numbers of seats is not identical with
those given hy the source cited in Table XXX ahove.
Total Theatre Receipts and Attendance
The total estimated "box-office receipts from 1929 through 1934, inclusive,
are shown in^Tahle XXXIII. Receipts fell from $1,100,000,000 in 1929 and 1930
to approximately half this amount in 1933. fflhile average estimated admission
prices fell from 30 cents in 1929 to 28 cents in 1930, the increased attendance
was sufficient to keep the total estimated receipts at the 1929 level, namely,
$1,100,000,000. The estimated average admission price fell from 30 cents in
1929 to 20 cents in 1933 and 1934, or a drop of one-third.
8976
TABLE XXXIII
Estimated Total Box-Office Receipts, Average Admission Price,
and Attendance, 1929-1934
Year
Total Receipts
(in millions)
Average
Admission
Price
Attendance a/
(in millions)
1929
$1,100
.30
3,660
1930
1,100
.28
3,920
1931
880
.24
3,330
1932
625
.22
2,840
1933
560
.20
2,800
1934
650
.20
3,250
Source: Standard Statistics Company, Standard Trade and Securities, "Theatres
and Motion Pictures," Vol. 75, No. 22 (February 20, 1935), p. TH-46.
a/ These figures are not consistent with the average weekly attendance
figures given "by the Film Daily Year Book, 1935, presumably becaixse
the latter source has a more complete coverage than that of the
Standard Statistics Company.
Theatre Receipts "by Principal States
Receipts "by ten principal states are shown "below in Chapter II, Table
XXXVIII, as reported by the Census of American Business for the year 1933.
New York State accounted for 23 per cent of the total receipts reported in
1933, although, as shown in Table XXVIII, above, it contained only about 9
per cent of the total number of theatres in 1934. The ten principal states
together accounted for more than 70 per cent of the total receipts in 1933,
Competition with Other Industries
Aside from competition between various types of theatres within the In-
dustry, motion picture theatres compete with radio broadcasting, sports, and
other aEiusements, such as the burlesque industry and the legitimate theatre.
Moreover, there exists a type of so-called non- theatrical competition wherein
schools, churches, lodges, and sometimes business concerns, display films to
the disadvantage of local exhibitors. No figures are available as to the ex-
tent of competition from these sources.
Expenditures for Theatre Construction
Table XXXIV shows the rapid decrease in annual theatre construction from
$163,559,000 in 1929 to $13,500,000 for the 16 months covering 1933 and the
first 4 months of 1934. The figure of $20,000,000 for the 11 months from May,
1934, to April, 1935, indicates the beginning of more activity in theatre con-
struction. The biggest decline came in 1932 when construction dropped 61 per
cent.
8976
.....
-42-
TABL2 XXXIV
Annual expenditure in Theatre Construction,
1929-March, 1935
Year
Amount
(COO's)
Per Cent
Change from
Preceding
period
1929
$163,559
1930
97,580
-40.3
1931
45,000
-53.9
1932
17 , 500
-61.1
1935, - April, 1934
L (16
months )
13,500
-22.8
May, 1934 - March,
1935
(11 months)
20,000
J.48.1
Source; Motion Picture Almanac.
Financial Condition
Table XXXV shows the latest available data concerning financial condi-
tions of exhibiting corporations reporting to the Bureau of Internal Revenue
for the years 1927 through 1932. The peak of earnings for all corporations was
reached in 1930, when net profits amounted to almost $30,000,000. However,
the year 1931 saw a decrease of about 87 per cent in profits from the 1930
peak. In the year 1932 motion picture theatres operated at a loss of more
than $59,000,000
TABLE XXXV
Gross Income, Net Profit or loss,
1927-1932
(in thousands)
Year
Gross Income
Net Profit or Loss
1927
$345,771
$18,951
1928
407,842
21 , 646
1929
508,439
22,394
1930
513,105
29,743
1931
434,652
4,423
1932
505,490
-59,336
Source; Bureau of Internal Revenue, Statistics of Income.
8976
-43-
PART 17: EXHIBITION
Chapter II. Labor Statistics
Number of Employees
Census data for the years prior to 1933 are not available on employment
and wages in the exhibition branch of the Industry. Table XXXVI, taken from
the Census of American Business, 1933, shows the total number of employees
and the average number employed per motion picture theatre. The figure of
6.9 for the average number employed per theatre is lower than that reported
by the Bureau of Labor Statistics in a study made of eleven neighborhood
theatres in Washington, D. C, in the latter part of 1931, when an average
of 10.7 employees per theatre was reported (See Table XL, "below). However,
according to figures given in trade publications such as the Film Daily s
Variety, and Motion Picture Almanac, theatres have been reported to average
about 16 employees. It is considered that the average for the entire
country approaches the latter figure as reported by the trade publications,
especially since the higher figure is further supported "by the fact that
employees such as musicians, vaudeville talent, and office employees were
omitted from the Washington survey.
TABLE XXXVI
Annual Average Number Employed, Pull and Part-Time,
"by Types of Theatres, 1933 aj
Total
Pull-Time
Part-Time
Average
Employees
Type of Theatre Num-
Per Cent
Num- Pel
' Cent
Num- Per Cent
per
ber
of Total
her of
Total
ber of Total
Theatre
Motion Picture only 65,728
100.0
54,030
82.2
11,698 17.0
6.9
Motion Picture and
Vaudeville 8,635
100.0
7,924
91.8
711 8.2
13.4
Total Theatres showing
Motion Pictures 74,363
100.0
61,954
83*3
12,409 16.7
7»3
Source: Census of American Business. 1933. "Service, Amusements, and Hotel s,1'
a/ Includes proprietors.
Total Annual Payrolls
Table XXXVII shows total payrolls for moving picture theatres in 1933.
Por all types of motion picture houses, full-time payrolls amounted to 94
per cent of the total.
8976
-44-
TAB1E XXXVII
.otal Payrolls, Full and Part-time, "by Types of Theatres, 1933
Type of Theatre
Total
Pull- Time
Part-Time
Amount Per Cent Amount Per Cent Amount Per Cent
(000' s) of Total (000' s) of Total (000' s) of Total
Motion Picture
only $71,451
Motion picture and
Vaudeville 10,305
Total Theatres Showing
Motion Pictures 81s, 756
100.0 $67,009 93.8 $4,442 6.2
100.0 10,053 97.5 252 2.5
100.0 77,062 94.2 4,694 5.8
Source: Census of American Business, 1933. "Service, Amusements, and Hotels."
Total Annual Payrolls as a Per Cent of Total Receipts
According to estimates of the Motion picture Almanac for 1933, payrolls
in the exhibition division represent about 25 per cent of total theatre
receipts. This figure is slightly higher than that derived from receipts
and payroll data reported "by the Census of American Business in 1933, which
listed receipts as $415,153,000 (see Table XXXVIII, "below) , and a total, full an<
part-time payroll of $81,756,000, which represents approximately 20 per cent
of total receipts. (See Table XXXVII, above.)
Number of TJage Earners and Total Annual Wages by Principal States
Table XXXVIII shows the distribution of full-time employees and payrolls
by ten principal states, as reported by the Census of American Business in
1933. The ten states listed employed almost 67 per cent of all the full-time
employees in that year and paid them 73 per cent of the total payroll. The
state of Hew York employed 18 per cent of all full-time workers, but reported
26 per cent of the total full-time payroll, which indicates high average
wages in that state, California was second with more than 8 per cent of
total employees, who received 8 per cent of the total payroll. Hew York also
received the largest share of theatre receipts, amounting to 23 per cent of
the total.
8976
-45-
TABLE XXXVIII
Total Receipts, Number of lull-Time Employees arid Payrolls,
Classified "by 10 Principal States, 1933 a/
Total Receipts Full-Time Employees Full-Time Payroll
Amount Per Cent Number Per Cent Amount Per Cent
(000' s) of Total (000' s) of Total (000' s) of Total
U. S. Total
$415,153
100.0
63,136
100.0
$80,519
100.0
California
35,223
8.5
5,220
8.3
6,284
8*3
Illinois
23,106
8.0
4,303
6.8
6,695
8.9
Massachusetts
22,809
5.5
3,678
5.8
5,141
6.8
Michigan
14,124
3,4
2,324
3.7
2,925
3.9
Missouri
10,256
2.5
1,601
2.5
2,370
3.1
New Jersey
19,179
4.6
12,116
3.4
3,647
4.8
New York
93,90?
22.6
11,463
18.2
19,778
26.1
Ohio
20 , 730
5.0
3,822
6.1
4,223
5.6
Pennsylvania
30,891
7.4
4,889
7.7
5,588
7.4
Texas
12,825
3.1
2,548
4.0
2,200
2.9
Total, 10 States
293,050
70.6
41,969
66.5
58,851
73.1
Total, Other States
122,103
29.4
21,167
33,5
21,668
26.9
Source: Census of American Business. 1933, "Services, Amusements, and The-
atres. 11
a/ The data include 122 legitimate theatres and operas which grossed
$8,611,000 and employed 1,182 full-time workers with a payroll of
$3,457,000. When allowance is made for the inclusion of those
legitimate theatres and operas, the employee and payroll data in
this table are identical with those given in Tables XXXVI and
XXXVII, above.
Wages and Hours
In Principal Cities. - Reports on wages and hours of unionized projection-
ists in 1933 were published by the Bureau of Labor Statistics in the Monthly
Labor Review for May, 1933. The report, which embraces almost 230 cities and
5,494 operators, shows that average weekly wages ranged from $22.50 to $95.00.
Prevailing hours ranged from 23 to 62 hours per week.
An analysis of the report discloses the distribution of weekly union wage
scales and hours worked per week shown in Table XXXIX. These ranges vary
primarily with the strength of the union in particular localities rather than
with the size and type of theatre, size of city, or section of the country.
It is believed that wages and hours of work of other organized workers (stage
hands and musicians) in the motion picture theatres would show a similar
variation, depending upon the strength of the union.
8976
-46-
TABLE XXXIX
Wage Scales and Hours Worked per Week "by Unionized
Projectionists, Classified "by Number of Cities, 1933
Item Number of Cities
Wage Scale
Under $35 per week 25
Between $35 and $45 75
Between $45 and $65 111
Over $65 29
Hours Worked per Week
Under 36 45
Between 36 and 40 43
Between 40 and 45 35
Between 45 and 50 44
Over 50 25
Source: Compiled from Bureau of Labor Statistics
Monthly Labor Review, (May, 1933) p. 1111.
In Washington. D. C. - Table XL shows the hourly wage rate and hours
worked per week by the various classes of wage earners employed in eleven
neighborhood theatres in Washington, D. C. in the latter part of 1931. 1/
The average weekly hours for all types of full-time employees ranged from
32.5 to 49 hours per week; for all types of part-time workers, from 8 to 24
hours. In the service branch, weekly wages for full-time employees ranged
from $9,28 to $18.40; for part-time employees, from $6.65 to $8.55. Tech-
nicians such as operators, electricians and engineers were the highest paid
help and averaged about 45 hours per week.
1/ The Bureau of Labor Statistics reports that the city of Washington was
chosen for this survey "because of the belief that this city has been af-
fected less than any other city of its size by the business depression,
and it would therefore be possible to segregate the effects brought about
by the changes in technology from those due to other causes, and especi-
ally to the depression."
8976
I
-47-
TABLE XL
Average Weekly Hours and Wages of Employees in 11
neighborhood Motion Picture Theatres of Washington, D. C.
by Branch of Work and Occupation, 1931
Branch of work
Num-
Num-
Aver-
Aver-
Aver-
and Occupation
ber
ber
age
age
age
of
Em-
Hours
Wages
Wages
'Thea-
ployed
per
per
per
ters
Week
Week
Hour
Service
Cashiers
ll
11
38.6
$14. 61
fpO.o (o
Relief Cashiers
3
3
1203
6.65
.540
Doormen
11
13
33.6
10.11
.300
Full-time Ushers
11
31
32.5
9.28
.285
irarn— T/Xme usners
1
rj
o
24. U
o . Do
• ODD
Matrons
2
2
39.0
13.53
.346
"D r\ T» 4" a Y» r*
ll
lo
D^ke O
lo . 4fcU
'T.'XP.
. OOD
Cleaners
2
3
37c 3
12.66
.339
Elevator boys
1
1
44.0
14.25
.323
irXC),JtJLyUj.OIJ
Operators
11
24
40.0
67.10
1,677
Relief operators
2
2
8.0
17.00
2.125
Music Organists
1
1
42.0
75.00
1.785
Stage
Electricians
1
2
48.0
70.00
1.458
Relief electricians
1
1
16.0
20.00
1.250
Maintenance
Engineers
1
1
49.0
33.25
.678
Watchmen
1
1
56,0
19.00
.339
Total Number Employed 117
Average per theater 10-7/11
Source: Bureau of Labor Statistics Monthly Labor Review, (November, 1931)
p« 5,
8976
-48-
Table XII shows the average weekly wage of full-time projectionists and
"service" employees in the various types of theatres in Washington, D. C,
Cashiers in downtown de luxe picture houses, labelled Type 1, averaged
$21,85 while in "other colored" theatres, Type 7, they averaged only $10.00
per week. Projectionist operators in Type 1 theatres averaged $96.67, while
in Type 7 they received $31.00.
TABLE XLI
Average Weekly Wages in Different Types of Motion
Picture Theatres of Washington, D.C. , "by Branch
of Work and Occupation, 1931
Branch of Work Theatre Types a/
and Occupation
1
2
6
4
5
6
7
Service
Cashiers
$21.85
$19.08
$14.57
$14.61
$10.70
$14.33
$10.00
Doormen
22033
21.15
20.00
10.11
11.15
16.08
11.22
Ushers
17.18
15.81
9.28
8.85
11.23
Porters
19.57
19.32
11.70
18.40
13.63
18.35
18.12
Matrons
10.46
11.70
13.53
9.00
Projection
Operators
96.67
83.55
50.00
67.10
41.47
47.33
31,01
Source: Compiled from Bureau of Labor Statistics, Monthly Labor Review
(November, 1931), pp. 4-6.
a/ Theatre types are defined as follows:
Type 1 - Down-town de-luxe presentation houses.
" 2 - Down-town first-class straight-picture houses.
" 3 - Other down straight-picture houses.
" 4 - First-class neighborhood straigt-picture houses.,
11 5 - Other neighborhood straight-picture houses.
" 6 - Colored first-class picture houses.
" 7 - Other colored picture houses.
8976
PART IV: EXHIBITION
Chapter III. Materials
Hunber of Pilm.s Used
De luxe theatres usually exhibit no nore than 50 feat-are pictures during
the "ear, while the better neighborhood theatres generally exhibit from 100 to
150 features, Both these types of theatre show each year approximately truce
as many short subjects as features. These short subjects consist of comedies,
cartoons, and travelogues, etc., but do not include news films.
In other neighborhood theatres, where features are changed three times
a week, approximately 150 are required annually. In recent years there has
developed the practice of showing two features during a program, and this has
greatly7 increased the number of films used per year.
Per Cent of Consumer's h'otion Picture Dollar Soent on Film Rental
Ho accurate data are available as to the total expenditures of exhibitors
for film rentals. According to Table XLII, the cost of producing films ac-
counts for a little more than 18 per cent of the consumer's moving picture
dollar, and distribution costs amount to almost 8 per cent. 'This makes a
total of 26 per cent which may be taken as a rough indication of the proportion
of the consumer's dollar spent on film rental.
§976
-SO-
TABLE XL 1 1
Per Cent of the Consumer' s Motion Picture Dollar
Accounted for "by the Chief Divisions of the
Industry, 1933
Division Per Cent
of Total
Production
Plajrers 4.5
Directors and Cameramen 2.4
Sets 1.8
Costumes .5
Location .5
Parr Film 1.4
Stories and Scripts 2.9
Administration 4.2
Total Production 18.2
Distribution
Branch Expenses 3.6
Print Cost 1.6
Eome Office Expense 2.6
Total Distribution 7.8
Exhibition
Payroll 24.7
Advertising 8.2
Depreciation and Maintenance 5.1
Rent, Real Estate, and Taxes 15.4
Other Taxes and Insurance 2.1
Electricity and Heat 5.1
Other Expenses 8.3
Interest and Profit 5.1
Total Exhibition 74.0
Total for Industry 100.0
Source: Motion Picture Almanac, 1953 •
8976
-51-
. PAST IV. EXHIBITION
Chapter IV. Unfair Trade Practices
Clearance and Zoning
Equitable clearance and zoning has been, and still remains, a most con-
troversial problem within the Industry, Eeature films, which open in large
cities for as much as $5,000 per week, may eventually return to those sane
cities for $25.00 Pirst-run exhibitors, paying large license fees and charging
high admission prices, have complained that insufficient time elapses between
the first-run of a feature picture at a large theatre and subsequent runs in
smaller theatres. Claims have been made that the payment of large fees en-
titles then to the wrotection of showing pictures without the fear that smaller
theatres may present the same film so soon after the first showing, that pros-
pective patrons would be inclined to wait for the lower admission prices on
subsequent rims elsewhere.
On the other hand, subsequent- run exhibitors have claimed that the major
exhibitors receive unreasonable clearance of time between first and subsequent
showings, and also that the large exhibitors have exacted rights over unreason-
ably large areas.
Other Unfair Trade Practices
host exhibitor contracts with distributors contain provisions that the
exhibitor will charge specified admission prices aid the cost of the license
to show the picture is based on these prices. Exhibitors, although publishing
these prices, have often materially lowered them by offering gifts or preninmsj
by holding lotteries, or by instituting a policy of throw-away tickets or two-
for-one admissions. Once started, these practices spread throughout an entire
competitve area and exhibitors have vied with each other in making more ex-
travagant offers.
The practice of showing two feature films for one admission price was an
extremely controversial subject during pro-Code discussion. Social, religious,
ana educational organizations protested that this policy of having a double-
feature program absorbed screen tine which would otherwise be given over to the
showing of travelogues and other educational short subjects. Some independent
exhibitors claimed that the elimination of this policy would deprive then of
their only means of competing with the larger moving picture theatres. This
practice, which spread rapidly in any territory where it was initiated, was
soon adopted by the larger as well as the smaller theatres.
Exhibitors as a group have considered unfair the leasing of films to non-
theatrical accounts, i. e., to social, religious, and educational organizations
which exhibit motion pictures such a.s travelogues, religious pictures, comedies,
and educational short subjects*
Exhibitors have claimed that discrimination has been used in the applica-
tion of "score" charges. These charges are a hangover from the early days
when "scored music" was sold in conjunction with pictures. rhen sound record-
ing was introduced the "score" charge was continued, being included in the
cost of the disc or sound track.
8976
Trade Associations
The Hot ion Picture Theatre Owners of America (V P T 0 1. - This
association was organized in 1920 by independent theatre ovmers to combat the
theatre expansion policy pursued "by Famous Players Lasky Corporation.
The organization is composed of several state and regional groups operat-
ing as independent associations. The national organization o„ttempts to coordi
nate activities and provide uniform action on problems of major inportance to
exhibitors. It nay roughly "be stated to represent at least 2,500 of the af-
filiated theatres.
In 1927, "because of the expressed belief that more constructive accom-
plishments could be secured by constructive cooperation rather than open
hostility, producer-distributor theatre owners were granted membership. The
organization immediately "became financially dependent upon these new members
and control passed from the hands of the independents to the new group.
Allied States Association of Motion Picture Exhibitors. - This Associa-
tion was originally formed in 1923 as a protest against some of the practices
of the Motion Picture Theatre Owners of America. It was fashioned after the
M.P T 0 A. and in many instances regional groups simply transferred their al-
legiance from one organization to the other. In 1926, following a promise by
the II ? T 0 _-. to serve the interests of the independent exhibitors primarily,
Allied States voted to disband and affiliate with the former. Two veoxs later
certain prominent independent exhibitor members of the original Allied groiro
decided to reorganize.
In 1932 Professor Lewis Howard reported that Allied States represented
6,000 theatres. It is generally conceded by the Industry that the larger
circuits are represented by the ii ? T 0 A, and the smaller theatres by Allied
States.
Trade Union Activity
International Alliance of Theatrical Stage Employees and Motion Picture
Machine Q-oerators of the United States and Canada. - This union was composed
of approximately 26,000 members in 1934, according to a statement made in
that year by its Assistant President, Louis Krou.se . It is affiliated with
the American Federation of Labor and its members are the skilled employees in
the Industry. The organization is composed of a number of local unions
throughout the United States and Canada.
8976
-53-
APPEHDIX
Exhibit A, Persons Qualified as Experts on the Entire Industry
Will H. Hays, President, Motion Picture Producers &
Distributors of America, Inc.,
28 West 44th Street, Hew York, Hew York
David Palfreyman, Theatre Service Division, Motion Picture
Producers & Distributors of America, Inc.,
28 West 44th Street, Hew York New York
Sol A. Rosenblatt, former Division Administrator, MBA,
International Bo.il ding, Radio City, Hew York
former Secretary of the Code Authority,
now connected with Variety, Inc. ,
154 West 46th Street, ITew York, New York
former 'Counsel for the Code Authority,
now connected with Metro-Goldwyn-Mayer,
Legal Department,
Hew York, New York
represented Independent Exhibitors on Code
Authority,
Pall River, Massachusetts
President, Motion Picture Theatre Owners of
America; also represented Independent
Exhibitors on former Code Authority,
1600 Broadway, Hew York, ITew York, and/ or
Columbus, Mississippi
Abram E. Myers, Chairman of Board and General Counsel for
Allied States Association of Motion
Picture Exhibitors,
729 15th Street, H.W. , Washington, D. C.
John P. Knight, Maintenance Executive, Paramount Theatres
Service Corporation,
Times Square, Hew York, Hew York
Pat Casey, Producers' Representative for Studio Labor,
1600 Broadway, Hew York, Hew York, and/or
5504 Hollywood Blvd., Hollywood, California
George Browne, President, International Alliance of Theatrical
Stage Employees and Motion Picture Machine
Operators of the United States and Canada,
Earle Theatre Building, Washington, D. C.
John C. PI inn,
Tjrree Dillard,
Nathan Yamins,
Ed Kuykendall,
8976
■54-
Louis ICrouse, Assistant President, International Alliance
of Theatrical Stage Employees and Motion
Picture Machine Operators of the United States
and Canada,
Earle Theatre Building, Washington, D. C.
Steven ITewman, International Representative, International
Alliance of Theatrics,! Stage Employees and
Motion Picture Machine Operators of the
United States and Canada,
3671 Valley Brink Road, Los Angeles, California
Joseph TJeher, President, American Federation of Musicians,
1450 Broadway, Hew York, Hew York
Prank G-iimore, President, Actors Equity Association and Chorus
Equity Association,
45 West 47th Street, Hew York, New York
Professor M. P. McNair, Disinterested authority on the Industry,
Harvard Bureau of Business Research,
Cam d r i dge , Mas sachuse 1 1 s
Professor Howard T. Lewis, Disinterested authority and historian
on the Industry,
Harvard Graduate School of Business,
Cambridge, Massachusetts
Terry Ramsaye, Editor, Motion Picture Herald; Writer, historian
and authority whose works have "been
regarded "by subsequent historians as
original.
897S
-55-
APPEHDIX
Exhibit B. The Advent of So-mid, in Motion Pictures
Sound, in Exhibition
The advent of sound in 1926 caused a revolution in the Industry
comparable with the introduction of the feature picture in 1913. The
development sud.denly changed the entire business and revived a failing
interest in motion picture entertainment. The tremendous influence of
good music later brought to sound- equipped theatres a large increase in
patronage. At first only shorts were synchronized with sound reproduced,
from discs. Companies moved cautiously to make the transition to sound
as gradual as possible, presumably because of the large technical changes
involved..
Warner Brothers' Vitaphone ushered in the present commercially
successful innovation in August, 1926. Eox closed a contract with Western
Electric for the development of Movietone in January, 1927, which led. to
a cross-licensing arrangement with Vitaphone. A simple attachment to the
projectors was developed by which Vitaphone and Movietone equipment could,
be used interchangably. Subsequent cooperation of General Electric,
E. C. A. and Western Electric with major producers brought quick progress*
Cost of equipment for reproduction was constantly decreased, due to the
Industry's knowledge that small- theatre installations were necessary to
the success of sound, pictures. Eox "caught" the Lindbergh takeoff for the
solo flight to Paris for the Movietone Hews. The "covering" of the
Lindbergh reception in Washington with sound newsreel made history. How-
ever, the distribution of the newsreel was restricted, due to the limited
number of wired houses.
Marketing of the Western Electric equipment by Electrical Research
Products began in August, 1927, offering the systems which embraced sound-
on-film, sound- on- disc, and non- synchronous disc systems. Installation
costs ranged from $8,000 to $15,000 in price, depending upon the theatre
and its accoustical requirementse
Meanwhile, Warner Brothers had secretly prepared an all-dialogue
picture entitled. "The Lights of Hew York." Experiments up to this time
had includ.ed. mostly sound effects and music with only scatterings of
dialogue. Vitaphone and Movietone Hews, as short "all talkers," had been
tremendously successful, Fnile successfully received throughout the
country, "The Lights of Hew York" clearly demonstrated that the most rigid
care had to be exercised in the selection of words given the characters to
speak. Voices which would synchronize were necessary. Stars began to
worry about lessons in elocution.
Wired, theatres prospered while unwired houses were not even given
proper exploitation advantages. Exhibitors were fretful concerning the
oft-arising question of interchangeaMlity< OH which the patent holders
refused clearly to commit themselves although well-informed sources had
conceded, it to be no problem, provided reproduction standards and quality
were satisfactory.
8976
-56-
The year 1929 found sound pictures off to an auspicious start, due
to the announcement of lower prices by Western Electric for either the
Vitaphone or Movietone reproduction equipment for June 1st delivery at a
price of $5,500 each, or $7,000 for "both. At the end of 1929, wired
theatres numbered 9,350. Will H. Hays estimated that theatre attendance
increased 15,000,000 weekly during the year.
Sound in Production
The introduction of sound in production caused a change in style
of making pictures, the erection of more than 100 sound stages, and the
installation of millions of dollars in equipment. Old talent was
eliminated in numerous instances and new talent introduced. An addition
of approximately 5,000 employees was reported at the end of 1930. It
has been estimated that 99 per cent of all pictures produced in 1930 were
either sound or all-talking pictures.
The cost of making a picture with sound was estimated to be from
five to seven times the cost of making an all-silent picture. The
increased overhead, loss of "box-office names of players who had starred
in silent pictures, employment of additional writers, loss of time through
experimentation, and the use of more film were the major contributing
factors.
At the end of 1930, 60 per cent of the exhibitors were using the
sound-track method of projection and the remainder were using the disc
method. Until late 1930, Warner Brothers and First National were
producing all pictures on discs, but in that year they began to use the
sound-track method. The disc method has the disadvantage that the discs
are cumbersome and hard to handle, and the method is also more expensive.
According to the Motion Picture Daily of July 29, 1935, 18 patent
licenses for a new sound system have been issued. The invention is known
as "the dynamic multiplier system," by which the undesirable character-
istics of present sound apparatus are eliminated. More life-like quality
is effected, which may again revolutionize the Industry.
8976#
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